Monday, April 22, 2024

3641: The Political Thoughts of Fidel Castro

 By Kamran Nayeri, April 19, 2024



Preliminary Remarks

This essay is based on an installment in a series of articles I have been writing in Farsi for the socialist website Naghd-e Eghtesada-e Siasi (Critique of Political Economy) in Iran. The series offers a reassessment the Cuban revolution that weaves together my first-hand observations of social and political life in Cuba from my ten visits to the island from 1994 to 2006 with the relevant literature. 


My view of the Cuban revolution was formed by the U.S. Socialist Workers Party (SWP). However, the SWP, which was an effective revolutionary socialist organization since its founding in January 1938, began to degenerate under Jack Barnes, its National Secretary, in the 1980s and has become a tiny pseudo-socialist cult of personality that currently takes pro-imperialist and pro-Zionist positions. 


In the 1960s and the 1970s, the SWP leadership characterized the Cuban revolution as the first health workers' state since the October 1917 Russian socialist revolution. However, in the 1920s, the revolution degenerated resulting in the Stalinist authoritarian regime. Whereas the Bolshevik Party was a proletarian revolutionary organization armed with a program for socialist revolution, the July 26th Movement in Cuba was organized around a national democratic program outlined in Castro's courtroom speech and subsequently published by his supporters as History Will Absolve Me (1953). After overthrowing the Batista dictatorship, Castro's leadership began implementing its national democratic program. However, given the hostility of landowners and capitalists, as well as U.S. imperialism and increased political activity of the working people, the Castro leadership undertook nationalization of the critical sectors of the economy, and on May Day 1961 Castro (1961) declared socialism as the goal of the revolution.


Analyzing the revolution through Trotsky's theory of Permanent Revolution, in the 1960s and the 1970s the SWP leadership characterized the Castro leadership as "revolutionaries of action." That is, they recognized that the Castro leadership was following the anticipated dynamics in that theory without being armed with such a theory. Trotsky's theory, first formulated for the Russian Revolution, predicted that the bourgeoisie in peripheral countries would fail to lead the national democratic revolution, and to be successful, it had to be led by the working class in alliance with the peasantry. However, the victorious proletariat will proceed to the socialist revolution, which will require solidarity and support from the proletariat of the industrial capitalist countries to succeed in the long run. 


In the 1980s, the Barnes leadership broke with the historical program and norms of the SWP by denouncing Trotsky's theory of Permanent Revolution, allegedly in favor of Lenin's theory of "democratic dictatorship of the proletariat and peasantry." However, the two theories have much more in common than the differences that Barnes' grouping claimed, as shown by Trotsky and Lenin's mending fences and the former joining the Bolshevik Party in the summer of 1917 and becoming a central leader of it. At the same time, Barnes's leadership argued that the Cuban Communist Party was, in fact, the leading communist (revolutionary socialist) leadership in the world and predicted the formation of a New International centered on the Cuban revolution. That prediction never came true. Yet, a significant change in the SWP's attitude toward the Cuban Communist Party occurred. Whereas in the 1960s and 1970s, the SWP leadership followed the revolutionary socialist program and the Leninist party norms of the Fourth International, the Barnes' SWP broke with them root-and-branch. Instead, it initially began following the Communist Party of Cuba policies even though it lacked a revolutionary socialist program and did not follow the norms of a Leninist Party or adhere to the principles of socialist democracy. Eventually, the Barnes leadership dropped pretending it was following Lenin or the Communist Party of Cuba as it continued its rightward shift. By 2006, it embraced Zionism without a discussion and currently supports the U.S. imperialist policy in Ukraine and Israeli genocidal war in Gaza. 


In October 1992, after political disagreements with Barnes's leadership, I resigned from the SWP. This made it possible for the first time for me to visit Cuba in June 1994. However, that visit shattered the conceptions imparted to me in the 1970s and the (Nayeri 2019). I decided to continue visiting Cuba and reassess my understanding of the Cuban revolution and its leadership. The series I am writing in Farsi is to share my reassessment with the readers. 


Introduction

From 1962 to 1965, when the new Communist Party of Cuba (PCC) was established, there was a written and public debate between two views of socialism and transition to it in magazines of some ministries in Cuba. Later called the Great Debate, some critical contributions to it are collected in a volume by Bertram Silverman (1971). I have discuss these in my essay on the "Political Thought of Ernesto Che Guevara" which I will translate into English as soon as possible.

Guevara initiated the debate with a critique of the Soviet model supported by the leaders and cadres of the former Popular Socialist Party (PSP). Founded in 1925, the Communist Party of Cuba like other parties of the Communist International were taken over by the Stalinists and changed its name Popular Socialist Party in 1944. The Soviet model was copied with modifications in Eastern Europe, including Yugoslavia, where it was appropriately called market socialism. 


The Cuban government invited noted Marxist economists to participate in the Great Debate (Kapcia 1988; Albert and Hahnel 1981), and Charles Bettelheim, a trained economist aligned with the French Communist Party, as well as Ernest Mandel, a leader of the Fourth International, contributed to the debate giving it an international scope. However, Fidel Castro kept silent during this debate. That seems odd as he was the undisputed leader of the revolution, who announced the socialist goal of the revolution and led the effort to forge the new Communist Party. His views mattered most given the critical theoretical debate with immediate practical application in Cuba. At the time, Carlos Rafael Rodriguez, a central leader of the former PSP, was the head of the Agrarian Institute in charge of land reform, and Ernesto Che Guevara was the director of the National Bank of Cuba as well as Minister of Industry from 1961-65. They each implemented what they believed was the correct model of socialist development in their area of responsibility. There was a clear practical need to decide which course to follow for the transition to socialism in Cuba. 


There is rich literature dealing with the ideological aspects of the Cuban revolution, particularly Fidel Castro's political thought (see  Pérez Jr. 1988, pp. 438-39, for a helpful short list of readings). 


However, late in his life, Fidel Castro invited the Spanish Ignacio Ramont, Editor-in-Chief of Le Monde Diplomatique (1991-2008), to interview him about his life published as Fidel Castro: My Life, A Spoken Autobiography (Castro and Ramonet 2006). I use this as my primary source because it leaves out much of the guessing in the literature about the political evolution of Fidel Castro. My finding is that while it may be true, as Samuel Farber (1983) has argued, that the PSP was overtaken by Castro's radicalism, it is perhaps truer that Castro himself was won over to the essential elements of the PSP political views, that is, the Stalinist worldview. Before I document it, let us sketch out Fidel Castro's life. 


Childhood and Youth

Fidel Castro Ruz was born in Biran, in Oriente province, on  August 13, 1926. His father Angel Castro y Argiz was a poor peasant from Galicia, Spain, who migrated to Cuba and eventually became a landowner through hard work. He had a sugar cane farm and a comfortable life. Fidel's mother was Lina Ruz, a servant at his father's house. Of several brothers and sisters, some of whom were from other women, Fidel held a lifelong friendship with Raúl, who was five years younger.


When he was six, his father sent him to live with a teacher in Santiago de Cuba, the nearest city. In his autobiography, Fidel complains about inadequate food and poor teaching (Castro and Ramonet 2009, p. 44). He also relates hearing explosions at night, which he attributes to revolutionaries fighting the Machado government. Two years later, Fidel was sent to Colegio de La Salle, a Jesuit school, as a day student. He continued attending Jesuit schools until he went to the University of Havana at the end of 1945. Castro recalls that, at the time, the university was for the children of the middle class. Castro also volunteers that his best school was when he lived as a child on his father estate in the countryside, which he identifies with freedom.


University years

Castro says his high school teachers were all nationalists, and in 1947, he joined the populist Orthodox Party of Eduardo Chaibas that fought corruption. He joined its nationalist "Radical Action" committee that worked to achieve political and economic independence of Cuba. In the same year, Castro joined the Cayo Confites group that wanted to overthrow the long-standing dictatorship of Rafael Trujillo in the Dominican Republic. He was also the chairman of Federacion Estudiantil Universitaria (FEU, the Federation of University Students) Committee for Independence of Puerto Rico and the Committee Against Racism. Castro remained in the Orthodox Party until 1955.


It was during his university years that Castro became familiar with the names of the leaders of the pro-Moscow Popular Socialist Party (PSP), such as Juan Marinello, Raul Roa, and Blas Roca, whom he identified as "Marxist Leninists."


Castro says he became anti-capitalist after taking a course in political economy with Professor Portela, realizing the limits of capitalism. He had three majors at the university: law, diplomatic law, and social science.


During the same period, Castro says, "I was learning more and more about Marx and Lenin. I was also reading Engels and other authors' works on economics and philosophy, mainly political works, political ideas, and Marx's political theories (Castro and Ramonet 2006, p. 89)."


Ramonet asks Castro: "What works by Marx were you familiar with?" Castro responds: "What I liked most from Marx, apart from the Communist Manifesto, were The Civil Wars [sic] in France, The Eighteenth Brumaire, the Critique of the Gotha Programme and other works of a political nature (ibid. p. 90)." He adds: "I was very impressed by Engels's work on the history of the working class in England." He includes The Dialectics of Nature among the books he had read. As his reading of Lenin, he mentions The State and Revolution, Imperialism: A Superior Phase of Capitalism [sic].


Moncada

On September 10, 1952, Batista, who knew from the polls that he would not win in the presidential elections, staged a coup. Castro says he considered himself a "Marxist-Leninist " at the time (ibid. p. 103). As I noted earlier, Castro considered the Stalinist Popular Socialist Party as Marxist-Leninist. Castro adds: "I had a compass that I found in Marx and Lenin, and for ethics, I found it in Marti (ibid. p. 103)." "I decided to begin a revolutionary program and a people's uprising. From that time on, about the struggle that lay ahead and the basic revolutionary ideas to support it, I had a clear idea which is reflected in History Will Absolve Me (ibid.)." He continues: "[At that time,] there was no class consciousness except among the members of the Popular Socialist Party who were educated well politically. But there was class instinct (ibid.)."


Now, that is an odd statement. As I will show below, Castro also says at the same time in Cuba the easiest thing was to win over Cubans to the ideas of Marxism. Moreover, how did Castro, who was until 1955 still a member of the Orthodox Party, knew whether and how well the members of the PSP were politically educated, and by what standard? He also says the PSP was politically isolated at the time. Castro also knows that at the time the PSP was openly opposed to his political course, starting with the Moncada campaign, but reversed its position in 1958 as the July 26th Movement was on the cusp of victory. 


For his plan of armed attack on the Moncada military base, Castro says he recruited 1,200 young men, almost all from the ranks of the Orthodox Party, after personally holding a conversation with each one of them. To do this, he drove his car around Cuba for 50,000 kilometers. Of course, he did not tell them of his specific plans. "They were young guys—twenty, twenty-two, twenty-three, twenty-four (ibid. p. 108)." 


Castro held classes with his close associates to study "Marxism." They read Franz Mehring's biography of Marx. "One thing I learned: the easiest thing in the world was to convince people of Marxism. I am not bad in speaking and preaching (ibid. p. 109)."


Together with his close associates like Jesus Montane and Abel Santa Maria, Castro trained these men militarily. 


"On July 26, 1953, a young Orthodox, Fidel Castro, led a suicidal attack on the second largest military installation of Moncada in Santiago de Cuba. The attack failed, but the dimensions of the failure distinguished it from all others: the plan was as daring as the failure was spectacular. It served to catapult Fidel Castro into contention for leadership over the anti-Batista forces and reaffirmed armed struggle as the principal means of opposition. Once again, Cubans responded to political crisis and filled the political vacuum (Perez Jr. 1988, p. 290)."

On October 16, 1953, Fidel Castro gave a two-hour defense speech in the courtroom, later published and distributed by his supporters, known as the July 26 Movement, as History Will Absolve Me (Castro 1953). In his speech, Castro argued the Batista coup had foreclosed any peaceful way to oppose his policies. He also said that if his forces were victorious, they would immediately implement the program outlined in his speech. Some highlights of it follow:

•  Giving non-mortgageable and non-transferable ownership of the land to all tenant and subtenant farmers, lessees, sharecroppers, and squatters who hold parcels of five caballerías of land or less, and the State would indemnify the former owners based on the rental which they would have received for these parcels over a period of ten years.


•  Granting workers and employees the right to share 30% of the profits of all the large industrial, mercantile, and mining enterprises, including the sugar mills. The strictly agricultural enterprises would be exempt in consideration of other agrarian laws which would be put into effect.

•  Granted all sugar planters the right to share 55% of sugar production and a minimum quota of forty thousand arrobas for all small tenant farmers established for three years or more.

•  Confiscation of all holdings and ill-gotten gains of those who had committed fraud during previous regimes, as well as the assets and ill-gotten gains of all their legates and heirs. To implement this, special courts with full powers would gain access to all records of all corporations registered or operating in this country to investigate concealed funds of illegal origin and request that foreign governments extradite persons and attach holdings rightfully belonging to the Cuban people. Half of the property recovered would be used to subsidize retirement funds for workers, and the other half would be used for hospitals, asylums, and charitable organizations.

•  It would be declared that the Cuban policy in the Americas would be one of close solidarity with the democratic peoples of this continent and that all those politically persecuted by bloody tyrannies oppressing our sister nations would find generous asylum, brotherhood, and bread in the land of Martí; not the persecution, hunger, and treason they see today. Cuba should be the bulwark of liberty and not a shameful link in the chain of despotism.

Castro also demanded solutions to social problems such as land, industrialization, housing, unemployment, education, and health care. He also demanded the return of civil rights and political democracy.


After two years in prison on the Isle of Youth, Castro was released together with other political prisoners after an extended campaign by mothers for their freedom. Soon after their freedom, Raul and then Fidel Castro learned their lives were in danger and left for Mexico. Meanwhile, the political mode had changed. Even large political parties and ordinary people had turned against Batista after the fraudulent 1954 elections. Students constituting the Revolutionary Directorate who protested against Batista were compelled to resort to guerrilla struggle.


In Mexico, Fidel Castro met Ernesto Guevara through Nico Lopez, who was part of the group that attacked the Bayamo garrison at the same time as the attack on Moncada. Raul Castro had already met Guevara. Castro says: "There was nothing surprising about our immediate sympathy with one another: he he'd been traveling around Latin America, he he'd visited Guatemala, he'd witnessed the American intervention there, and he knew how we thought. I arrived, we talked to each other, and right there he joined up, he immediately signed on (Castro and Ramonet 2006, p. 173)." 

 

Ernesto Guevara was assigned as the physician for the group, and Alberto Bayo, a former Spanish general, taught him how to use a gun and military skills. Castro says Guevara was a sharpshooter.


On November 25, 1956, 82 revolutionaries boarded Granma, an 18-meter boat, to sail for southeastern Cuba from Tuxapan in Mexico. On December 2, Granma reached Las Coloradas in Oriente province. Frank Pais had started an attack on Batista forces in Santiago de Cuba to divert attention from the landing of the Granma. However, Castro's group was discovered and surprised, and most revolutionaries were killed or wounded. Guevara was wounded. On December 20, two groups one headed by Fidel Castro, and another headed by Guevara found each other. At the time, the revolutionary army was fewer than two dozen men.


In July 1957, Castro organized a second column under the command of Guevara.


On January 1, 1959, Batista fled Cuba at 2 in the morning. The revolutionaries had won the war. A group of military officers staged a coup in Havana. Opposing them, Castro called for a continued military campaign. Santa Clara was under the command of forces led by Guevara. Two columns of revolutionaries, one headed by Guevara and another by Camilo Cienfuegos, moved toward Havana.


On January 2, Fidel Castro called for a general strike, which was honored nationwide. Guevara's column entered Havana and occupied La Cabana fortress, which was Batista's army's headquarters.

 

On January 5, Manuel Urrutia, who was designed as president by the July 26th Movement, took office.


On January 8, welcomed by hundreds of thousands, Fidel Castro entered Havana.


In July 1961, Fidel Castro proclaimed socialism as the goal of the Cuban revolution. At the same time, efforts were made to organize a new Communist Party from three currents: the July 26 Movement, the Popular Socialist Party, and the Revolutionary Directorate. In 1962, the Great Debate began about what socialism is and how to transition to it, and it lasted until the Communist Party was founded in October 1965. The debate centered on Guevara's critique of the Soviet model and defenders of it.


 Why did Fidel Castro not enter the debate? My best guess is that he favored the view advocated by leaders of the Popular Socialist Party. I will provide some evidence to support it below.


Castro and Stalinism

In discussing PSP's support for and participation in Batista's 1940-44 government, Castro 

tells Ramonet:


       "Batista had already launched a bloody suppression of that famous strike in April 1934—a strike that came after Batista's cunning coup against the provisional government of 1933, which was unquestionably revolutionary in nature, and the result of the heroic struggle of the labor movement and the Cuban Communist Party, led by Martinez Villena, formerly by Mella and Balino. Before that anti-fascist alliance, Batista had murdered I don't know how many people, had stolen I don't know how much money. He's always been, since his betrayal in 1933, a pawn of Yankee imperialism (ibid. p. 88)."


Ramonet responds: "So there were Communists in the Batista government."

Castro confirms: 


"That's right. The order came from the International, where there was not a true collective leadership. [The Communists in the government] were, however, as I've said, wonderful people. Some of them, like Carlos Rafael Rodriguez—A supremely honest man, whom I remember with great affection; he was with me in the Sierra Maestra when

Batista launched his last offensive (ibid.)."


It is also notable how Castro uncritically discusses the PSP's and Stalin's course to forge "anti-fascist" coalitions in which the working classes were subordinated to the capitalist class in each country.


Further, while Castro attributes Stalin's Communist International policy of ordering national parties to follow its policies to a lack of "collective leadership," he does not recognize any break in the politics of the Soviet Union after Lenin or in the revolutionary character of the Cuban Communist Party founded by Mella and Balino in the 1920s, that is, he entirely avoids the problem of Stalinism. 


Castro goes on to add that almost immediately after the Allies' victory in World War II "came the worldwide wave of repression of Communism. In the United States, you had the rise of McCarthyism…In Cuba itself, under the administration of that physiology teacher, honored Communist labor leaders were brutally murdered." He adds: "The historical lesson is that a revolutionary party can carry out tactical movements but must not commit strategic errors (ibid. p. 89)." It remains unclear what Castro means by "strategic errors" and "tactical movements." Nowhere did he criticize Stalin's popular front policy or PSP's participation in Batista's government. 


Castro, who had earlier expressed his interest in politics, displays no knowledge of the October 1917 socialist revolution in Russia and what happened to it and the Bolshevik Party in the 1920s. He does not show any interest in the question of whether the policies of Stalin and those who followed him had anything to do with those of Lenin and the Bolsheviks who inaugurated the Communist International in 1919 to advance the world revolution in cooperation with the newly formed communist parties inspired by the October revolution. It was Stalin who turned the Communist International into his tool of diplomacy to pursue "peaceful coexistence" with imperialism.

 

Even though Castro recalls the Molotov-Ribbentrop agreement, that is, between Hitler and Stalin, but does not mention it was to divide Europe. He does not even mention the Tehran conference between Churchill, Roosevelt, and Stalin in which Stalin agreed to the sphere 

of influence of imperialist powers in the hope of "peaceful coexistence" with them. Castro merely recalls the anti-communism campaign that followed. The "historical lesson" he draws is a military formula for strategy and tactics to explain away the Stalinist treachery in the Kremlin and Cuba. 


Ecological disasters in the Soviet Union

Ramonet asks about "enormous ecological disasters" in the Soviet Union (ibid. p. 354). Castro responds: "It [Soviet Union] did not work well. But it was ten times better than what there is now." Ramonet, who has not heard an answer to his question, persists: "The fact is that seventy years of Soviet socialism hadn't been able to build the 'new man.' All 

those revelations: first—did you have any suspicion of all that? And second, did it affect your own convictions? (ibid.)"


Castro responds with more apologies for Stalinism. 


"I am not interested in defending any of the bad things that the Soviets did. I should make it clear, I came to think, and I still think this way today, that without the accelerated industrialization that country was forced to engage in, largely because of the West, which blockaded them. Invaded them, and made war on them, the USSR would neverhave been saved from the Nazi onslaught; they would have been defeated (ibid. 357)."


Castro's apologetic claim that these problems are worse in capitalist societies is false on the face of it. It could not have been based on his own direct observations. And it is doubtful that any scientifically valid research was ever done to compare these problems in the Soviet Union with those in the capitalist West. Further, why did Castro not hold the "socialist" Soviet Union to a higher standard? Most importantly, Castro ignores the critical problem of transition to socialism, the focus of the Great Debate in Cuba in 1962-65, and Guevara's criticism of the Soviet Union and Eastern European "socialism." Finally, years after the historical verdict on the Soviet and Eastern European "socialism," why was Castro still trying to claim it was better than Western capitalism?

 

Castro's embrace of Stalinism as socialism explains why the Cuban Communist Party never held a public discussion of the collapse of the Soviet Union and Eastern European "socialisms." It also explains why, in Cuba, the conspiracy theory that the U.S. intelligence agencies were to blame for the collapse of the Soviet Union had currency. This is the same explanation offered by the U.S. Communist Party and other Stalinist parties around the world.


Ramonet asks about the environmental crises in the Soviet Union (ibid. 354-55). Castro again tried to explain them away: "The Soviets did not know about the dangers to the environment, and in a territory as huge as the USSR, it may have been hard to see it, but ecological disasters that have been discovered there are just like the United States and Europe (ibid. 355)." Can the vastness of Soviet territory be an excuse for the anti-environment policy of the Stalinist rulers? Why could not the Soviet scientists predict the environmental effects of its economic and industrial policies? Why did Castro not admit to Moscow's responsibility in the Chornobyl disaster? When he responds to Ramonet's direct question, he again tries to divert attention to ecological crises in the West. (ibid. p. 355) 

 

Ramonet asks Castro about the massive shrinkage of the Aral Sea. He responds: "I remember Khrushchev telling me about that plan, the conquest of new lands, hyperproduction. They were determined to do the same things the U.S. was doing. And, well, agriculture prospered there, crops with irrigations and so on, but the problems with the salt residue kept getting worse (ibid.)."

 

Castro continues: "…These are very complex and profound questions unresolved by mankind, and which can't be blamed, for goodness' sake, on the former USSR (ibid. p. 356)." Again, Castro wanted to deflect any criticism of the Stalinist policies by making it into the "complex" question facing humanity. He refuses to accept that policies adopted in the Soviet Union were environmentally harmful and that policymakers were responsible for the environmental crises. Castro also shows an appetite for genetic engineering. His approach to the rest of nature is similar to the bourgeois anthropocentric view that emerged from the Scientific Revolution of the seventeenth century, which subjected nature to unending human wants. This approach to nature was also adopted by socialists (Nayeri October 2021).


Problems with the Soviet infrastructure 

Ramonet asks about the Soviet infrastructure: "The lamentable state of infrastructure, means of transport—trains, highways—telephones, electricity, all in very bad shape (ibid. p. 357)." Castro responds: "I'm not interested in defending any of the bad things that the Soviets did." But he goes on to defend Stalin's forced industrialization policies: 


"I should make it clear, I came to think, and I still think this way today, that without the accelerated industrialization that that country was forced to engage in, largely because of the West, which blockaded them. Invaded them, and made war on them, the USSR would never have been saved from the Nazi onslaught; they would have been defeated (ibid. 357)."


Here, Castro justifies Stalin's forced industrialization without considering his counterrevolution against the October 1917 socialist revolution. 

However, he almost immediately adds that despite the economic blockade, military attack, and even a possible nuclear war, the leadership of the Cuban revolution never resorted to suppressing the Cuban people: "Here there has never been a forced collectivization. We respect a principle: socialism will be made by free human beings who want to build a new society (ibid.)." 


Of course, Castro is correct about agriculture and peasants and farmers. However, he forgot that in 1968, they nationalized even beauty shops and barbershops.


Castro attempts to explain the authoritarian character of Soviet rulers:

"So yes, in the Soviet Union, because of its traditions of absolutist government, hierarchical mentality, and feudal or whatever culture, a tendency towards the abuse of power emerged, and especially the habit of imposing one country's, one hegemonic party's, authority on all the other countries and parties." (ibid. p. 361) 


He adds: "At a certain point we became convinced that if we were directly attacked by the United States the Soviets would never fight for us, nor could we ask them to (ibid. p. 365)."


Ramonet never asked Castro's opinion about whatever happened to the October 1917 socialist revolution. Was the Soviet Union, as Castro explains it, "socialist?" In what sense? In Castro's opinion, was there any qualitative difference between Lenin and the Bolshevik Party on the one hand and Stalin, Khrushchev, and Brezhnev and their Communist Party? Was Castro familiar with Trotsky's analysis of the degeneration of the October 1917 socialist revolution due to the rise of a massive counter-revolutionary bureaucracy, also known as Stalinism? If not, why not? 

What would he have thought of it if Castro was familiar with Trotsky's analysis? Why did the masses of working people not resist the collapse of the Soviet Union and Eastern European "socialism" and, in some countries, actively participate in it?


The Communist Party adopts the Soviet Model

On the first of April 1965, Fidel Castro read Ernesto Che Guevara's farewell letter to the public in which he resigned from all his official positions in Cuba before leaving to join the revolutionary struggle in Africa. On 14 March 1966, Guevara clandestinely returned to Cuba after he found factionalism among the fighters in Congo. In December, he clandestinely left for Bolivia to start a guerilla campaign. 


On 8 October 1967, Guevara and seventeen of his co-fighters were ambushed, and he was injured and captured. On the orders from Washington and the Bolivian government, he was murdered. 

On October 15, Castro confirmed Guevara's death. On October 18, a memorial meeting with hundreds of thousands of Cubans was held in his honor. 


In 1972, Cuba joined the Comecon and signed trade relations with the Soviet Union. The first five-year plan was developed and implemented based on the Soviet model from 1976 to 1980.


At the beginning of the 1980s, Raul Castro had noticed widespread demoralization among Cuban workers. The third Congress of the Communist Party in 1986 focused on rectifying these errors. In his speech to Congress, Fidel Castro discussed the monetization of the production sectors of the Cuban economy, stating that every problem was assumed to be "solved" by throwing money at it and spreading corruption (Castro, December 1, 1986). The next day, Castro said: 


"We really went from one extreme to another, from a complete rejection of material incentives -- we had this problem at one time -- to a fetishism with money. There was a belief that all problems could be solved with money. There was also a belief that mechanisms could solve problems. This was another false belief. There was also the belief that in a socialist society, problems could be solved with mechanisms. The political work was neglected. We began to experience a number of negative tendencies. I believe that our party, the people who compose the political vanguard of our country, militants and party cadres, are undoubtedly being chosen among this country's best citizens.


…. 


"I ask if the problems experienced by hospitals, health service centers, and everything we want to do related to that field could be solved with economic mechanisms, economic estimates, economic incentives, payment according to work, and things of that sort, we could end up understanding what socialist ideology is and how socialism is built. I believe that those who think that socialism can be built only with economic mechanisms and economic estimates are making a terrible ideological mistake even if they knew by heart Karl Marx's entire three or four volumes of Das Kapital.  (Castro, December 2, 1986)."


The last sentence appears to me to have been directed at the leaders of the Communist Party who had favored the adoption of the Soviet model, the former leaders of the PSP. I will discuss these issues in my essay on the political thoughts of Ernesto Che Guevara centered on the Great Debate in Cuba (1962-65). 


Returning to tensions in Castro's political thought, if in 1986 he knew that using the Soviet model in Cuba for only 14 years had resulted in a "system worse than capitalism," why in 2006 he still defended the Soviet Union's "socialism" and refused to consider that using the same model of development for 70 years might have had something to do with its collapse? 


The Third Congress voted for a Rectification Process to correct the earlier errors and to turn toward Che Guevara's theory of transition to socialism. The following year, Carlos Tablada's book on Guevara's theory of transition to socialism was published and won the Casa de Las Americas prize. Remarking about the book on the twentieth anniversary of Guevara's death, Castro said: "What I for modestly ask for at this twentieth anniversary is that Che's economic thought be made known; that it be made known here, in Latin America, in the world (Castro October 8, 1987)." 


While a campaign for voluntary labor began to get organized on a large scale, the Soviet Union collapsed in 1991, and so did COMECON. Cuba sank into an economic depression combined with the intensification of the U.S. embargo, which Cuba called the Special Period in the time of peace. The PCC and the Cuban government embarked on economic liberalization as it could not provide Cubans with necessities. 


On 31 July 2006, Fidel Castro delegated his duties in the Council of Ministers to Raul Castro. On 24 February 2008, in a letter to the National Popular Assembly, Fidel Castro, citing illness, resigned his positions as the head of the Council of Ministers and Commander-in-Chief of the armed forces. Raul Castro was elected in his place and was also elected as the General Secretary of the Communist Party. Under Raul Castro, Cuba embraced market socialism. He used market socialist methods in sections of the Cuban economy run by the armed forces under his command. Let's note that the Soviet model Che Guevara in the Great Debate and the model led Cuba to a "system worse than capitalism." In a future article, I will discuss some of the effects of these changes on the Cuban working people.


Fidel Castro's "Marxism-Leninism" 

As we know Castro considered himself a "Marxist-Leninist" when he was planning the Moncada attack and that is what he considered the Popular Socialist Party and its leaders to be. As Castro himself explains PSP leaders faithfully followed Stalinist policies in Cuba, including politically supporting Batista and joining his government in 1940 as part of the popular front policy of the Kremlin. Castro also supported Stalin's economic and industrialization policies and at least some of his international policies. In effect, Castro subscribes to the essence of Khrushchev's criticism of Stalin in the twentieth Congress of the Communist Party of the Soviet Union in 1956 as a cult of personality. With Stalin's death and criticism of his dictatorial rule, the Communist Party of the Soviet Union was sanitized as the leader of the "socialist camp." Castro continued to view the Soviet Union as socialist. Castro offers no criticism of Stalinist theories of "socialism in one country," political support for the so-called national bourgeoisie and the two-stage theory of the revolution in the peripheral countries, and his policy of "peaceful coexistence" with imperialism.


In February 1961 before he declared socialism as goal of the Cuban revolution, Castro offered his view of the Popular Socialist Party in an interview with L'Unita, the official newspaper of the Italian Communist Party—a mass party at the time.


"Q. Comandante, what do you think about the Popular Socialist Party, which is the party of "Castro communists?

"A. It is the only Cuban party which has consistently called for a radical change of social structures and relations. It is true that at the beginning, the communists distrusted me and us rebels. Their distrust was justified, their position was absolutely correct both ideologically and politically. They were right in being distrustful because we of the Sierra who were conducting the guerrilla war were still full of petit bourgeois prejudices and defects, in spite of our Marxist readings. Our ideas were not clear, although we wished to destroy tyranny and privileges with all our strength. Then, we met with each other, we understood one another, and started to work together. The communists have shed much blood and heroism for the Cuban cause. At present, we continue to work together in a loyal and brotherly way (Savioli 1961)."


Thus, while it is true that the PSP "radicalized" to join Castro in the 1965 Communist Party, Castro himself admits it was he who was won over by the worldview of the PSP when he announced that the Cuban revolution had socialism as its goal. What kind of socialism? The "socialism" of the PSP and, by extension, the Kremlin.


That may explain why Castro kept silent in the Great Debate of 1962-65, in which Guevara, by then a hero of the Cuban revolution, criticized Soviet Union socialism. 


It must also be added that the leaders of the Cuban revolution, including Castro and Guevara, have been supportive of the Dependency School theories, such as terms of trade and monopoly capitalism. These theories are not Marxist (see Nayeri 2024 chapters 2 and 3) and coincide well with a Stalinist approach to the periphery of world capitalism. 


Together, these explain Cuba's "anti-imperialist" foreign policy, which has included political support for "anti-imperialist" capitalist leaders in the periphery and military interventions in other countries by Moscow. Castro supported Soviet-led Warsaw Pact suppression the Prague Spring in 1968. It is important to distinguish "internationalism" of the Cuban Communist Party from the internationalism of Marx, and Lenin that were centered on working-class solidarity to advance the world socialist revolution. (For a brief discussion of Castro's view on the Iranian revolution of 1979 see, Nayeri 2010) 


When the journalist Jeffrey Goldberg who is Jewish asked Castro, "Do you think that Israel as the Jewish state has a right to exist," he answered: "Yes, undoubtedly (Goldberg 2010)." What was Castro's reason for this position? The same as those offered by Zionists, imperialists, and Stalinists: antisemitism in Europe and Hitler's holocaust. Castro did not reflect on the dispassion of the Palestinian people and the ongoing ethnic cleansing and annexation of ever more of Palestine by the Zionist State. As I have explained elsewhere (Nayeri 2017), to recognize Israel as a colonial settler state is to deny the right of Palestinian people to self-determination. Israel is also Western imperialism outpost in the Middle East. Castro's position on Israel carries a political cost. The rightwing pseudo-socialist Socialist Workers Party of the United States which I briefly discussed earlier used Castro's pro-Zionist position to justify its own support for Zionism (Galinsky, 2023). As the genocidal Israeli war against 2.3 million Palestinians in Gaza raged on, a SWP spokesperson in Oakland, California, appeared at the public hearing of the City Council to argue against a resolution it was about to vote on after public comment to demand a ceasefire in the Gaza Strip. She spoke against a ceasefire to allow Israel to continue "to uproot Hamas," which the SWP considers a terrorist organization. That position turns out to be precisely like what Netanyahu's rightist Zionist government. Due to popular pressure, even the Biden administration and the European Union leaders claim to favor a cease-fire. 


In his 724-page autobiography, Castro never speaks of the working class as the subject of history. Thus, he shows no knowledge of historical materialism of Marx and Engels where classes and not parties and individuals no matter how talented are the agents of history. The extent of his familiarity with the works of Marx, Engels, and Lenin appears to be limited, as he admits. 


Castro also admits that the Cuban revolution and other revolutions in the twentieth century have shown that the conquest of state power by vanguard parties and guerrilla movements have proven easier than transitioning to socialism. Yet, there has been no significant contribution to the theory and practice of transition to socialism by Castro or anyone else in the leadership of the Communist Party of Cuba since Guevara's contributions in the 1960s.


Castro asks himself: "…What is Marxism? What is socialism?" He then replies: "They have no clear definition (Castro and Ramonet 2006, p. 389)." In response to a question by Ramonet about the ideological confusion after the collapse of the Soviet Union, he responds: 


"In the ideological realm, there is a lot of confusion." On the same page, he demonstrated his own: "People struggle against underdevelopment, disease, illiteracy, but what we might call global solution to humanity's problems cannot be solved based on individual nations, because today more than ever before, domination is achieved on a global basis (ibid.)."


But then, where is his criticism of "socialism in one country," an excuse for the Stalinist betrayal of the world revolution? Are not the teachings of Marx, Engels, Lenin, Trotsky, and Che Guevara all about the need to extend the world socialist revolution and how it relates to developing socialism in any country? 


Given Fidel Castro's political thoughts as outlined by himself, the question that remains is how to reassess the Communist Party of Cuba and the character of the Cuban revolution. 

 


Refrences:

Albert, Michael and Robin Hahnel. Socialism Today and Tomorrow. 1981.

Farber, Samuel. “The Cuban Communists in the Early Stages of the Cuban Revolution: Revolutionaries or Reformists?” Latin American Research Review XVIII,1983, pp. 59-84,.

Castro Ruz, Fidel. "Cuba is a Socialist Nation." May 1, 1961. 

____________. “Speech at the Third Congress of the Communist Party of Cuba,” December 1, 1986.

____________. "Speech at the Closing of the Third Congress of the Cuban Cumminist Party of Cuba." December 2, 1986. 

____________. "Speech on the Ocassion of the Twenteith Anniversary of Ernesto Che Guevara's Death," in Carlos Tabalada's Che Guevara: Econmics and Politics of Transition to Socialism.

Nayeri, Kamran. " The Iranian Revolution, Imperialism, and Fidel Castro." Our Place in the World: A Journal of Ecosocialism. October 12, 2010. 

 

_____________. " Is Palestinian Right to Self-Determination Compatible with the Israel's "Right to Exist?" Our Place in the World: A Journal of Ecosocialism. March 1, 2017. 

___________.  “Between Dream and Reality. My First Visit to Cuba,” May 21, 2019. 

___________. Toward a Theory of Uneven and Combined Capitalist Development. 2024. 

Savioli, Arminio. “The Nature of Cuban Socialism,” L’Unita, February 1, 1961.

Silverman, Bertram. Man and Socialism in Cuba: The Great Debate. 1971. 

Pèrez, Jr. Louis A. Cuba: Between Reform and Revolution. 1988.

Sunday, March 10, 2024

3640. The Law of Value in Relation to Self-Management and Investment in the Economy of the Workers’ States

By Ernest Mandel, World Outlook, 1963


The Cuban magazine Nueva Industria – Revista Economica, organ of the Ministry of Industry, published two polemical articles in issue No.? (October 1963) of great interest, one written by Ernesto Che Guevara and the other by Commandante Alberto Mora, Minister of Foreign Trade. This polemic testifies to the vitality of the Cuban Revolution in the field of Marxist theory, too. It deals with a number of questions of the utmost importance in the construction of a socialist economy: role of the law of value in the economy during the epoch of transition; autonomy of enterprises and self-management; investments through the budget or by means of self-investment, etc. Involved in these issues is the problem of the ideal model for the economy in the epoch of transition from an underdeveloped country, a problem of absorbing interest to the Bolsheviks during the 1923-1928 period and which arose again, even if on a rather low theoretical level, in Yugoslavia, Poland and even in the Soviet Union in recent years.

The Law of Value in the Economy During the Epoch of Transition

The question of the “application” of the theory of value in the planned and socialized economy of the epoch of transition has been subjected to the worst confusion, mainly because Stalin, in his last work, posed it in a both gross and simplistic way: “Does the law of value exist (sic) and does it apply in our country? … Yes, it exists there and it applies there.” This is an evident truism. To the extent that exchange occurs, commodity production survives, and exchange is thereby objectively governed by the law of value. The latter cannot disappear until commodity production withers away; that is, with the production of an abundance of goods and services.

But this does not answer the concrete question around which turns the fundamental discussion begun in 1924-25 between Preobrazhensky and Bukharin which has continued to develop, with ups and downs, among Marxist economists and theoreticians up to now: to what exact degree and in what sphere does the law of value apply in the economy during the epoch of transition?

Stalin himself, while muddying the problem, had to admit a fact which the Khrushchevist economists are nevertheless beginning to draw into question; namely, that in the “socialist” economy, the law of labour-value cannot be the regulator of production, that is, cannot determine investments.

In developed capitalist economy, the law of value determines production through the play of the rate of profit. Capital flows toward the sectors where the rate of profit is above the average and production increases there. Capital recedes from the sectors where the rate of profit is below the average, and production decreases there (at least relatively). When the means of production are nationalized, so that there is neither a market for capital nor its free entry and withdrawal, nor even the formation of an average rate of profit with which the rate of each particular branch can be compared, clearly there is no longer a possibility for the “law of value” to be directly the “regulator of production.”

If, in an underdeveloped country which has carried out its socialist revolution, the “law of value” were to regulate investments, there would flow preferentially toward the sectors where profitability is the highest in relation to prices on the world market. But it is precisely because these prices determine a concentration of investments in the production of raw materials that these countries are underdeveloped. To escape from underdevelopment, to industrialize the country, means to deliberately orient investments toward the sectors that are least “profitable” for the time-being according to the criterion of the long-term economic and social development of the country as a whole. When it is said that the monopoly of foreign trade is indispensable for industrializing the under-developed countries, this means precisely that it cannot be accomplished until these countries are able to “pull the teeth” of the law of value.

But perhaps this qualification applies only to the “law of value on the world market”? Cannot the law of value at least alter investments on the national scale, once world prices are left aside? This is wrong again. The industrialization of an underdeveloped country cannot be carried out rapidly and harmoniously except by deliberately violating the law of value. [1]

In an underdeveloped country, and precisely because of its underdevelopment, agriculture tends from the beginning to be more “profitable” than industry, handicrafts and small industry more “profitable” than big industry, light industry more “profitable” than heavy industry, the private sector more “profitable” than the nationalized sector. To channel investments according to the “law of value,” that is, according to the law of supply and demand of commodities produced by different branches of the economy, would imply developing monoculture for the export trade by priority; it would imply preferential construction of small shops for the local market rather than steel plants for the national market. The construction of comfortable lodgings for the petty-bourgeois or bureaucratic layers (an investment corresponding to “effective demand”) would have priority over the construction of low-cost homes for the people which clearly must be subsidized. In short, all the economic and social evils of underdevelopment would be reproduced despite the victory of the revolution.

In reality, the decisive meaning of this victory, of the nationalization of the means of industrial production, of credit, of the transportation system and foreign trade (together with the monopoly of the latter), is precisely to create the conditions for a process of industrialization that escapes from the logic of the law of value. Economic, social and political priorities, consciously and democratically chosen, take the lead over the law of value in order to lay out the successive stages of industrialization. Priority is placed not on immediate maximum returns, but on the suppression of rural unemployment, the reduction of technological backwardness, the suppression of the foreign grip on the national economy, the guarantee of the rapid social and cultural rise of the masses of workers and poor peasants, the rapid suppression of epidemics and endemic diseases, etc., etc.

That is why the industrialization of the workers states follows a different road from that of the capitalist countries where industries are built beginning with the sectors that will most easily satisfy “effective demand.”

To violate the law of value is one thing; to disregard it is something else again. The economy of a workers state can disregard the law of value only at the price of losses to the economy which could be avoided, of useless sacrifices imposed on the masses, as we shall later demonstrate.

What does this mean? In the first place, that the whole economy must be carried on within the framework of a strict calculation of the real costs of production. These costs will not determine investments; these will not automatically go toward “the least costly” projects. But to know the costs means to know the exact amount of subsidies which the collectivity grants the sectors which it has decided to develop by priority. In the second place, that it is necessary to have a stable yardstick for these calculations; without stable money, no rigorous planning. In the third place, that all sectors where economic or social priorities do not dictate any preference are to be actually guided by the “law of value,” (for example, different crops aiming at the domestic market). In the fourth place, so longs as the means of consumption remain commodities, and aside from the commodities and services deliberately subsidized or distributed free by the state (pharmaceutical products, school and training materials, books, etc.), the preferences of the consumers will freely operate on the market the law of supply and demand will affect prices, and the plan will adapt its projected investments to these oscillations (within the limits of what is available in finances, equipment, raw materials, etc.).

In the light of these initial remarks, we can consider the importance of the two problems raised in the Guevara-Mora polemic: What is value? Are means of production commodities in the transitional epoch? Mora affirms that value is not essentially abstract human labour; that it is “a relation existing between the limited disposable resources and the growing needs of man” (p.15). Still better: he holds that value is a “category created by man under certain conditions and for certain (!) ends” (p.15).

It is clear that we are faced here with a subjective deformation of the Marxist concept of labour-value, of which Marx specified the essence to be abstract human labour. It is not by chance that Mora refers to the “neo-Marxist” Soviet economists [2], who have been attacked, in the USSR itself, and rightly so, as wanting to introduce surreptitiously the marginal theory of value. His conception, according to which the “law of value is the economic criterion for regulating production” in the epoch of transition (p.17) – while he affirms that it is not the only regulator – necessarily involves the notion according to which “exchange of the means of production” occurs even when these are completely nationalized, that “sale of commodities” occurs even when these means of production pass from one nationalized enterprise to another, and that the “contradictions” between the state enterprises justify the assertion that a “change in ownership” occurs at the time of these exchanges (p.19). All these affirmations are contrary to the reality and to Marxist theory. On all these questions, Che Guevara is entirely right against Mora.

Mora states that if in investments, one leaves aside the law of value, one must “pay the price”; in doing this, you automatically limit the social resources available to satisfy other needs. This is true, and we, likewise, underline the necessity for strict calculation of production costs in all fields. But in limiting oneself to this economic truth, the social content of the epoch of transition is done away with; that is, in abstracting from the class struggle, Mora leaves out a whole important side of the problem.

In fact, it is impossible to operate in the economy of the epoch of transition – any more than in any other economy containing different social classes – with aggregates like “social revenue,” “social costs,” “social price of investments,” without at the same time posing the question: “Who is to pay this price to whom?

The society of the epoch of the transition to capitalism to socialism is not homogeneous. In conducting an appropriate policy of investments, of prices, wages, foreign trade, etc., the workers state can act in such a way that the social benefits of priority investments (numerical reinforcement of the working class; elevation of its standard of living, skill, culture and consciousness; reinforcement of its leading role in the state and economy; accentuation of its participation in political life, etc., etc.) are paid economically by other social classes; the residue of the former owning classes; imperialism; the small commercial entrepreneurs and independent peasants. In an expanding economy, this economic price, paid particularly by the merchants, artisans and independent peasants can moreover be accompanied by a rise in their standard of living, on condition that this rise is less than it would have been in the framework of the “free play of the law of value” (thanks, for example, to a progressive income tax). [3]

The Law of Value and Foreign Trade

All the preceding evidently constitutes only a general framework for replying to the specific problems which the question of economic calculation and the orientation of investments raises in each particular workers state. Here, Mora is right when he stresses (p.18) that in a small country like Cuba, which depends strictly on foreign trade for the current functioning of its industry (spare parts and raw materials) and for the equipment of its new enterprises, the necessity for rigorous economic calculation is imposed with all the more reason than in a big, largely autarchic country like the Soviet Union.

Exports are made according to prices on the world market. So that these exports will not constitute a constant drain on the national economy (they must be met in any case in order to keep industry and industrialization going through imports), it is necessary that the production costs of exported goods should as a whole be below the prices obtained on the world market. It is necessary to fix the objective on progressively suppressing all exports at a loss, so that exports are not only a means supplying the national economy but, in addition, an important source of accumulation, a means of defraying part of the expense of industrialization – a part of the costs of not observing the law of value on the national market! – from abroad. The tendency for current prices of sugar to rise on the world market creates, moreover, a favorable framework for the success of such a policy. The progressive diversification of exports, to render the Cuban economy independent of future fluctuations of current sugar prices on the world market, must point to the selection of other export, products where production costs remain below the prices obtained abroad (that is, average prices on the world market).

But Mora mixes up the need to carry out all these calculations in the most strict way with the extension of the field of application of the law of value in the Cuban economy. The two phenomena are not identical; they can even be directly contradictory.

The law of value determines the exchange value of commodities according to the quantity of labour socially necessary to produce them. The concept of “socially necessary” labour is determined in turn by the average level of the productivity of labour in a country, and by the concept of the effective demand of society – which must never be confounded with human needs or social needs from an objective point of view. In an underdeveloped country like Cuba, all production of many industrial branches can correspond to an “effective demand,” that is, all labour in these branches can appear as “socially necessary,” despite a very low level of productivity. The reference to the law of value, far from thereby resolving the problem of rapid improvement in the productivity of labour, of the technological transformations which these industries must undergo, can only obscure it. Because the law of value will have a tendency to keep alive archaic enterprises, as long as the state of scarcity exists, from the moment there ceases to be free movement of capital and free imports of commodities which could stimulate competition with these enterprises.

Far from being a field of application of the law of value, the dependence of Cuba on foreign trade thus implies the necessity of economic calculation of comparative international costs, which could provide a choice of economic criteria, independently of any rigid “law.” The necessity to assure the country’s supply of spare parts and raw materials imposes a certain volume of exports, even if these are carried out at a loss. The necessity to maintain and develop the existing level of industries dependent on foreign supplies imposes searching, as quickly as possible, for profitable exports in relation to prices on the world market – even if this means switching investments toward branches that are already profitable in relation to the national market (branches that already sell their commodities at their exchange value). The possibility of exporting at a profit, of gaining supplementary resources from exports, of transforming trade into a constant source of socialist accumulation, will moreover permit just the liberation of the economy from the tyranny of the “law of value,” that is, will permit the development of new industries despite the fact that their production costs at the beginning will be higher than the prices of imported products, without lowering the standard of living or the rate of accumulation in the country. This is an aspect of the real dialectics of the dependence on foreign trade and the play of the law of value that is decidedly more complex than Comrade Mora thought!

The Law of Value and Autonomy of Decision at the Enterprise Level

In the debate which has raged in some of the workers states, the problem of the area of application of the law of value is intimately linked with the problem of autonomy of decision at the enterprise level in the field of investment. The Yugoslav authors have even formulated with regard to this a veritable new dogma which requires critical analysis: “Without the right of the self-management collectives to dispose of a considerable part of the social surplus product, no genuine self-management.” [4] This analysis must examine the problem from two aspects: economic efficiency (criteria for choosing one investment project rather than another), social and political efficiency (success in the struggle against the bureaucracy and bureaucratization).

The more backward a country is, the more conditions of almost universal scarcity rule not only in the means of production sector but also for much of the industrial means of consumption (at least for the great majority of the population), and the more detrimental the practice of self-investment is, the more detrimental is it to permit the self-management collectives to determine for themselves the projects for priority of productive investments.

It is evident in fact that under conditions of almost general scarcity of industrial commodities, almost all the investment projects can be economically profitable, no matter how gross the economic errors that are committed. Almost every profitable industrial or agricultural enterprise (providing funds for investment) is like an island in a sea of unsatisfied needs. The natural tendency of self-investment is therefore to attend to what is most pressing, both locally and in each sector.

In other words: if the self-management enterprises hold large funds for self-investment, they will have a tendency to orient their investments either toward the commodities which they lack the most (certain equipment goods; raw materials; auxiliary products; emergency sources of energy), or toward the commodities which their workers or the inhabitants of the area lack the most. Thus, criteria of local or sector interest are placed above national interests, not because the law of value is “denied,” but precisely because it is applied! This means, once more, to orient industrialization toward the “traditional road” which it followed in the historic framework of capitalism, in place of reorienting it according to the requirements of a nationally planned economy.

An attempt can be made to reconcile national planning requirements and allocating self-managed enterprises considerable funds for self-investment. The means chosen for this aim can be a levy-tax in behalf of national development funds and equalization funds for regional development. This is evidently a step in the right direction, but it does not at all resolve the problem.

Since an underdeveloped economy is characterized precisely by the fact that the enterprises of high productivity are still the exception and not the rule, it is sufficient to leave them a part of their net surplus product and the inequality of development between the industrialized localities and the non-industrialized localities, the inequality of development and of revenue between the archaic enterprises which enjoy only an average level of productivity and the enterprises technologically “up to date” will increase instead of diminishing. It is necessary, moreover, to insist on this fundamental idea of Marxism: any economic freedom, any “autonomy of decision” and any “spontaneity” increases the inequality so long as there exist side by side strong and feeble enterprises or individuals, rich and poor, favored and unfavored from the point of view of location, etc. This is the reason why, it should be noted in passing, that according to Marx the mechanism of the law of value leads to its own negation; competition inevitably ends in monopoly.

The economic logic of a planned economy therefore speaks completely in favor of productive investment by budgetary means at least for all the big enterprises. What must be left to the enterprises is an amortization fund sufficiently large to permit modernization of equipment with each renewal of fixed equipment (gross investment). But all net investments should be made in accordance with the plan, in the branches and places chosen according to preferential criteria selected for the society and its economy as a whole. In this respect, too, the thesis of Comrade Guevara is correct.

The problem has been obscured, above all in the USSR, through associating it with the problem of heightening the material incentives in enterprises. Numerous Soviet economists have criticized the stimulants still employed today in the economy of the USSR to incite the enterprises (?) to carry out the plans. This criticism is in general pertinent. It has but to repeat what anti-Stalinist Marxists have said critically for many years. Yet, it is only necessary to examine closely the arguments of these economists to see that what is involved in reality is heightening of material incentives for the bureaucracy for whom the growth of revenues must in some way be the essential stimulus for the expansion of production in the enterprises.

This is where certain partisans of self-management, particularly in Yugoslavia, maintain that decentralization of the decisions on investment would be a powerful guarantee against bureaucratization. This thesis is based on a fallacy. The Yugoslavs are right in stressing that the power of the bureaucracy grows in relation to its freedom in disposing of the social surplus product. But the technicians and economists of the planning commission “dispose” of the surplus product only in the form of figures on paper; the real power of disposal is situated at the level of the enterprise. [5] The more that means other than consumption funds (distributed revenues and social investments) are left at the free disposal of the enterprises, the more is precisely bureaucratization stimulated, at least in a climate of generalized scarcity and poverty; also the greater the temptation becomes for corruption, theft, abuse of confidence, false entries – temptations that do not exist at the level of the planning commission, if only because of multiple checks. The concrete experience of Yugoslav “decentralization” has shown, moreover, that it is an enormous source of inequality and bureaucratization at the level of the enterprises.

But doesn’t the possibility of complete centralization of the means of investment at the state level create the danger of the economic policy as a whole favoring the bureaucracy, as was the case in Stalinist Russia? Obviously. But then the cause does not reside in the centralization itself; it lies in the absence of workers democracy on the national political level. [6] This means that a genuine guarantee against bureaucratization depends on workers management at the enterprise level and workers democracy at the state level. Without this combination, even the autonomy of the enterprises will eliminate none of the authoritarian, bureaucratic and (often) erroneous character of economic decisions made at the government level of the plan. With this combination, the centralization of investments – priorities being democratically established, for example through a national congress of workers councils – would not encourage bureaucratization, but, on the contrary, suppress one of its principle sources.

The Law of Value and Self-Management

“Heightening material incentives” in the enterprises cannot be a “stimulant” in the question of investments. But “heightening material incentives” in the self-management collectives can actually stimulate continual growth of production and productivity among the enterprises.

Certainly, under a regime of genuine socialist democracy, creative enthusiasm, the free development of all the capacities of invention and organization of the proletariat, constitute a powerful motor for the growth of production. But it would be a grave idealist and voluntarist error to suppose that in a in a climate of poverty – inevitable in an underdeveloped country immediately following the victory of the socialist revolution – this enthusiasm could last long without a sufficient material substructure.

The example of the Soviet Union, where the proletariat gave proof of an enthusiasm and spirit of self-sacrifice without parallel in the first years after the October Revolution, is instructive in this respect: a long period of deprivation ended inevitably in mounting passivity of the workers, daily material concerns taking precedence over attentiveness to meetings.

It is therefore imperative to link self-management to the possibility for the workers to immediately judge the success of each effort at increasing production by the elevation of their standard of living. The simplest and most transparent technique is that of distributing a part of the net revenue of the enterprise among the workers in the form of one or more months of bonus wages, the amount increasing or diminishing automatically with the level of revenue. The increasing collective material interest of the workers in the management of the enterprises moreover is superior to piece wages, inasmuch as it does not introduce division and conflicts in the workers’ collectivity, inasmuch as it corresponds better to contemporary technique, which place less and less importance on individual output and more and more importance on the rational organization of labour.

Self-management (and not mere workers control) seems to be the ideal model for organizing socialist enterprises. But it by no means hinders more or less unlimited competition among the enterprises, which flows from their autonomy in the domain of prices and investments. This autonomy cannot but reproduce a series of evils inherent to the capitalist regime: monopoly positions exploited in the formation of prices and revenues; efforts to defend these monopolies by “hiding” discoveries and technical improvements; waste and duplication in the field of investments; high cost or errors in decision, revealed a posteriori on the market (including the shutting down of enterprises); reappearance of unemployment, etc., etc. Useless and detrimental from the economic point of view, it by no means constitutes a sufficient guarantee against bureaucratization, as we have indicated above.

In this connection, the polemic of Lenin and Trotsky against the theses of the “Workers Opposition” is still completely valid. Marxism is not to be confused with the doctrine of anarcho-syndicalism. The genuine guarantee of workers power lies on the political level; it is on the state level that it must be established; any other solution is utopian; that is, unworkable in the long run and a source for the reappearance of a powerful bureaucracy.

For all these reasons, self-management does not at all imply wider recourse to the “law of value” in relation to centralized planning. [7] The fundamental data of the problem remain the same. It is necessary to carry out strict calculations of production costs to show in the case of each commodity whether its production has been subsidized or not. But nothing calls for the conclusion that prices must be “determined by the law of value,” that is, by the law of supply and demand. If such a conclusion still has some meaning with regard to the means of consumption, it is senseless for the means of production which, we repeat, are not commodities, at least in the great majority of cases. And even means of production which are still commodities – those produced by the private or co-operative sector for the delivery to the state, and which the state furnishes to private enterprises or co-operatives – cannot be “sold at their value” without encouraging under certain conditions private primitive accumulation at the expense of socialist accumulation. But, if the means of production are not sold “at their value,” the “value” of the means of consumption is itself profoundly modified.

Prices are, then, instruments of socialist planning and cannot be anything else in the epoch of transition from capitalism to socialism. If you say instrument of planning you likewise say instrument for determining the distribution of the national revenue between consumption and investment, an instrument for determining the distribution of revenues among the different classes and layers of the nation. To leave the determination of this distribution to the “law of value,” is to leave it in the final analysis to the “laws of the market,” to the “law of supply and demand,” that is, to economic automatism. And economic automatism would rapidly take us back to an economy of the semi-colonial type.

But to say that prices cannot be determined by the law of value does not at all signify that they can be independent of the latter. Society can never distribute more values than it has created without progressively destroying its accumulated wealth and impoverishing itself increasingly in the absolute sense of the term. The total sum of prices must therefore be equal to the total sum of value of the commodities produced (granting that there has been no monetary depreciation). The distribution of certain products – in goods or vouchers – below their value (subsidies!) automatically signifies a distribution of other products above their value. Without strict calculation of production costs; without book-keeping aided by an objective criterion; without a kind of double entry system that faithfully registers, for each product, alongside the price fixed by the state, the real cost and the subsidy (or the tax) there is not only no possibility for genuine scientific planning, there is above all no stimulus for the fundamental economic dynamic of the epoch of transition – the dynamic that progressively elevates one new branch of industry after another to the point of rendering it “competitive” in relation to prices on the world market, up to the time socialism announces its next triumph when socialist industry as a whole operates with a productivity superior to that of the most advanced capitalist industry.

At the moment, the “law of value” could theoretically govern the dynamic of the workers state (or more exactly: the workers states as an international whole; because it appears excluded that this situation could be first obtained “in a single country”). But at the precise moment when it is on the point of triumphing, its reason for being disappears. The highest level of productivity attained under capitalism in all its branches cannot be surpassed without approaching such a level of abundance that commodity production withers away. In the workers state “law of value” cannot channel investments except to the precise degree that it withers away and to the degree that along with it all the economic categories, products of a relative scarcity of material resources, likewise wither away.


Notes

1. “Planned economy in the transitional period, while founded on the law of value, violates it nevertheless at every step and establishes relations among the different economic branches, and between industry and agriculture in the first place, on the basis of equal exchange. The state budget plays the role of a lever for forced accumulation and planned distribution. This role must be increased in accordance with the latest economic progress. Credit financing dominates relations between the coercive accumulation of the budget and the fluctuations of the market, insofar as the latter enter in… If the domestic Soviet market is ‘freed’ and the monopoly of foreign trade suppressed – exchange between the city and countryside will become much more equal, the accumulation of the village (I refer to the capitalist accumulation of the farmer, the ‘kulak’) will follow its course, and it will soon be seen that Marx’s formulas likewise apply to agriculture. Once on this road, Russia would rapidly become a colony that would serve as the base for the industrial development of other countries.” (Leon Trotsky: Stalin Theoretician. Available in French in Ecrits 1928-40, Tome I, p.106) [Available in English in different translations as Stalin as a Theoretician in Militant, 15 September-11 December 1930 and Stalin as a Theoretician in International Socialist Review, Fall 1956 & Winter 1957.]

2. Among others, Novochilov, Kantorovitch and Menchinov. This question underlies the famous debate on the possible use of profit as the sole criterion in carrying out the plan. In reality, these economists are the spokesmen of the economic bureaucracy, who demand increased rights for the directors of enterprises – particularly the right to freely dispose of a part of the “invisible funds” (fixed equipment).

3. From 1924 to 1927, the Stalinist faction violently accused the Left Opposition – Preobrazhensky in particular – with wanting “to increase the prices of industrial products.” Preobrazhensky had simply proposed that industrial products could be sold “above their value” to the village, which could have been tied in perfectly with a progressive lowering of the sales price in view of the rapid growth of the productivity of labour. But when the Stalinist faction made the turn to accelerated industrialization, it increased the prices of industrial consumers goods through extremely high indirect taxes. While in 1928, the tax on turnover was not above 17.9% of the real turnover of retail trade, it rose to 78.1% in 1932, and in 1936, the nominal turnover of this trade was 107 billion rubles, of which taxes accounted for 66 billion rubles and the real turnover only 41 billion! (L.H. Hubbard: Trade and Distribution in the Soviet Union)

4. Thus Milentiji Popovic, in an article entitled Self-management and Planning: “On the other hand, in the sector of expanded social reproduction, in perfecting the system of investment on the basis of the new relations, our results are less conclusive, although the first steps have been taken in this direction. The establishment of non-administrative relations, of economic relations, in this sphere, reverts quite simply to the establishment of credit-interest (!) relations, and to taking them as the basis ...

“One must first of all counteract the contradiction which arises from the fact that the resources servicing social reproduction are deducted exclusively through administrative measures (taxes, duties, contributions) thus leaving free the organization of labour without the latter on the other hand becoming the ‘proprietor;’ the organization of labour evolves, in fact, into a unique system of credit in which these resources are at one and the same time ‘theirs’ and ‘common’ (article 11) …

It is possible to avoid, on the other hand, having subjective and political considerations as the only ones to be taken into consideration at the time of the adoption of the decisions concerning investments. It goes without saying that this method cannot and must not ever be pushed to its final conclusion. But a system can be constructed in which the political decisions will bear on the general orientation of the political economy while the distribution of the means destined for investment is carried out in accordance with the credit mechanism, according to financial and material (!) criteria fixed with more or less precision. In operating in this way the process of expanded reproduction is likewise ‘depoliticalised.’ This ‘depoliticalization’ is not absolute. It must be carried out to the degree that bureaucratism must be deprived of its base in this sphere as in the others.” (My emphasis – E.M.). – Current Questions of Socialism, No.70, July-Sept. 1963, pp.67-68.

5. This obviously does not apply to cases where raw materials, equipment, goods and sometimes even means of consumption are centrally distributed, becoming veritable hotbeds for germinating corrupted bureaucrats.

6. “Only the co-ordination of three elements, state planning, the market and Soviet democracy, can assure correct guidance of the economy of the epoch of transition and assure, not the removal of the imbalances in a few years (this is utopian), but their diminution and by that the simplification of the bases of the dictatorship the proletariat until the time when new victories of the revolution will widen the arena of socialist planning and reconstruct its system.” (Leon Trotsky: The Soviet Economy in Danger. Available in French in Tome I of Ecrits 1928-1940, p.127). [In English, in a different translation, see The Soviet Economy in Danger in Militant, 12 November 1932-7 January 1933.]

7. Certain Yugoslav authors take quite correct positions in this respect. See, for example, Dr. Radivoj Uvalic: “While the open market can be widely utilized, it cannot be the sole or even the principle regulator of the socio-economic relations of a socialist country.” And again: “The importance of the planned guidance of economic development under the conditions of socialism lies first of all in the possibility that is offered of considering profitability from the point of view of the economy as a whole and not from the point of view of each particular unit of the economy… This is the case in all branches of high concentration of capital (?), such as the production of the means of production and raw materials, which could be never developed sufficiently on the basis of the accidental play of the market, with the rate of profit as the sole stimulate.” (In: Socialist Thought and Practice, No.6, pp.47 and 55)